Sequestration cuts $85 billion out of FY2013 budget

Wednesday

Jun 26, 2013 at 6:30 PM

As the national debate over debt and deficit deepened in 2011, the White House moved to force Congress’ hand on spending reduction. The Sequester idea was floated as a way to bring Republicans and Democrats to the table for cost-cutting compromise to avoid automatic, across-the-board cuts.

As the national debate over debt and deficit deepened in 2011, the White House moved to force Congress’ hand on spending reduction. The Sequester idea was floated as a way to bring Republicans and Democrats to the table for cost-cutting compromise to avoid automatic, across-the-board cuts.

In 2011, unable to come to an agreement on what to cut and when, Congress passed the Budget Control Act requiring agreement on a plan to reduce the deficit - the amount the federal government goes into the red annually - by $4 trillion, including $2.5 trillion in cuts already in place. That meant that more than $1 trillion in cuts over 10 years had to be identified and agreed upon. If an agreement could not be reached, $1 trillion in automatic, arbitrary cuts across the federal government would be triggered in 2013.

Thus was born the specter of the Sequester - the cuts forced by the agreement.

Despite two years of often bitter partisan wrangling, or perhaps because if it, no agreement was reached. What had been intended as a move to force the hand of the Joint Select Committee on Deficit Reduction - the so-called Super Committee - turned into a deadline that could not be met.

The Sequester was to hit Jan. 1, 2013. However, fears that the end of the Bush tax cuts and a payroll tax cut combined with Sequestration would certainly kill the weak recovery and spark another recession resulted in parliamentary moves that reset the deadline for March 1.

On that day Sequestration went from concept to reality on the contemporary American scene.

The cuts instituted on March 1 were evenly split between domestic and defense programs. Over the fiscal years 2013-2021 slightly more than $1 trillion will be cut from line items including Medicare, weapons purchasing and base construction.

Mandatory programs like Medicaid and Social Security and welfare programs like Temporary Assistance for Needy Families and food stamps were shielded from the Sequester. Other programs like aid for Women, Infants and Children and the Low Income Home Energy Assistance Program are subject to the required cuts.

In 2013, $42.7 billion (7.9 percent) will be cut from the defense budget, $28.7 billion (5.3 percent) in domestic discretionary funding will be cut, Medicare will take a $9.9 (2 percent) haircut and another $4 billion in cuts to defense and nondefense programs will be made.

As the Sequester continues in 2014 cuts rise from the 2013 level of $85.4 billion to $109.3 billion a year. No programs are eliminated but the size - and cost - of programs will be reduced.

Timeline:

July 27, 2011 – The idea for automatic cuts to the federal budget – Sequestration – comes from the Obama White House according to journalist Bob Woodward and others.

August 2, 2011 – Congress sends Budget Control Act to President Barak Obama. He signs it and the clocks starts ticking toward Jan. 1, 2011 deadline for a budget deal to avoid Sequestration.

November 21, 2011 - The so-called Super Committee fails to reach agreement and President Obama tells Congress he will veto any move to void Sequestration.

May 10, 2011 - House Republicans pass the Sequester Replacement Act, an attempt to make cuts and avoid Sequestration.

December 20, 2012 – House Republicans pass Spending Reduction Act, another alternative to Sequestration unacceptable to Democrats and the White House.

March 1, 2013 – Sequester kicks in. White House tours are cancelled then later reinstated after uproar. Exhibitions by Navy’s Blue Angels canceled. Federal employees are furloughed one day per pay period.

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